Carbon EUAs settled almost 4.0% higher
25 May 2022
Natural gas futures opened stronger yesterday Natural gas futures opened stronger yesterday and gains were extended through the morning session before being pared back before the market closed. The market had declined in the three sessions previously as June, the front month shed 46.95p over those three days. At the close, June settled 1.64p higher at 136.67p. Contracts for the rest of the summer months were 5.00p higher on average yesterday. Prompt prices reversed Mondays gains as the spot and day ahead closed at 121.05p and 119.38p respectively despite the GB gas system being a touch short for much of the session. The GB baseload power market settled higher on Tuesday The GB baseload power market settled higher on Tuesday after gains in the gas and carbon markets provided support. The front month settled at £153.00/MWh, gaining £2.50/MWh which was in line with the average increase for the summer months. Contracts further out gained around £5.30/MWh on average. Baseload for the day ahead rose by 8.0% yesterday as forecasts for wind generation were revised lower for the remainder of the week. Carbon EUAs settled almost 4.0% higher yesterday with the spot closing at €80.48 per tonne. The crude oil markets struggled to find direction on Tuesday The crude oil markets struggled to find direction on Tuesday as Brent settled 14 cents higher at $113.56 a barrel while the U.S. benchmark, West Texas Intermediate fell by 52 cents to close at $109.77 a barrel. The U.S. driving season kicks off this weekend with the Memorial Day holiday next Monday and demand is expected to be the highest for two years despite the high prices at the pumps. According to industry sources U.S. reserves of gasoline and distillate stocks are down last week but official reports from the Energy Information Administration will not be released until later today. Meanwhile in China, Beijing has increased restrictions to prevent the spread of Covid-19 which has added to economic growth concerns. Prompt prices have opened lower Gas demand in the UK has fallen by almost 30MCM on yesterday’s levels and supplies are comfortable with a slight surplus showing. Prompt prices have opened lower with the spot and day ahead contracts down by 14.00p in early exchanges. On the curve NBP futures that have traded have reversed off the morning highs and are trading almost flat to yesterday’s close. The June contract reached 141.00p earlier but last traded at 136.70p. Futures past the remaining summer months have yet to get off their mark. The June contract for Brent is trading close to the day’s peak at $114.67 a barrel, which is up $1.11 on last night’s close.